When creating a global contract, you can specify payment terms for each partition in which the supplier exists.

Payment terms are not applied to certain line item types, to ensure that shipping and taxes are not included when payment discounts are calculated.

Only standard line items (and not additional charges such as tax or freight fees) are included when payment discounts are calculated. For example, if the payment terms offer a discount based on when the net amount is paid, Ariba Settlement includes only standard line items when calculating the net amount.

Payment terms specify when a supplier must be paid for an invoice and define any discounts that are available for early payment. Payment terms are defined and configured in Ariba Buyer. If Ariba Settlement is enabled, payment terms are used to generate payment schedules for payment transactions.

Payment terms are stored with supplier information, and are displayed on purchase orders, contracts, and invoice documents. Payment terms typically include:

• A unique ID, such as PT1
• A title, such as Net 45, 2%/30, 3%/20
• A description that can indicate the number of days within which the payment must be made and related information, such as discounts offered for early payment or other incentives.

For example, you might see payment terms displayed as:

Ariba Invoice compares payment terms that appear on invoices with the payment terms defined in the related purchase order or contract. If the payment terms do not match, Ariba Invoice creates an invoice exception that must be reconciled.